How much income tax do I pay?

The amount of income tax you pay depends on how much you earn. There is great news as we start our 2018-19 tax year, with increased thresholds for the Personal Allowance, Basic Rate and Higher Rate tax brackets.

3. Deduct any tax reliefs and allowances from your total taxable income figure. These are dependent on your personal circumstances and type of employment.

4. You are left with the amount you will be taxed on and can work out the tax percentage.

How do I pay income tax?

The method of income tax payment depends on how you earned the money. If you are employed and on a PAYE system, then your income tax is automatically deducted from your salary before you receive it. Your employer sends it to HMRC and you should see the amount somewhere on your payslip.

If you are self-employed, rent properties, have earnings from abroad and in some other instances, you need to submit a self assessment tax return to HMRC declaring your income. The self assessment system is the way to inform HMRC of these kinds of income and pay the correct amount of tax.

I have more income tax questions…

Have a look at our Income Tax Guide for more information which includes: taxable and non taxable income, what income tax pays for and who collects income tax. There’s also a handy Income Tax Refund Calculator to help you work out how much your income tax rebate is worth.

TaxBanana.com provides free, impartial information about all aspects of UK tax. This does not constitute tax advice and TaxBanana.com is not liable for the consequences of any financial decisions you make based on this information.

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